Employers looking to reduce health care costs may want to consider the old saying: “An ounce of prevention is worth a pound of cure.”
Preventive health care measures not only improve overall health, but can also drive down health care costs in the long run.
“Any approach that ignores helping the population reduce lifestyle risk factors such as obesity, smoking, stress and sedentary lifestyles will not succeed,” says Michael J. Culyba, M.D., vice president of medical affairs for UPMC Health Plan.
Recent studies have shown that more than half of American workers believe that wellness programs offered by their employers can lower health care costs and more than three-fourths of workers take advantage of educational tools and resources offered by their employers.
Smart Business spoke with Culyba about how focusing on prevention can reduce an organization’s health care spending.
What drivers impact health care costs?
There are several known factors that contribute to rising health care costs, including the increasing prevalence of preventable chronic diseases in the population, the clinical thresholds for the diagnosis of many chronic diseases are lower, the fact that every year medical science introduces new but costly medical technologies and specialty medications, and that our population is aging. Unfortunately, some of the increases in costs are due to the fact that the health system has not been able to totally eliminate errors or waste.
Can preventive measures be effective in bringing down costs?
Preventive measures that reduce or eliminate lifestyle risks such as smoking, obesity and poor physical activity alone are unlikely to affect many of the factors that drive up costs directly in the short term. But there are several direct as well as indirect health care costs that can be reduced by addressing these lifestyle risks and these should be of major importance to employers.
These indirect costs would include lost employee productivity due to absenteeism and presenteeism, as well as injuries secondary to these risks that result in workers’ compensation and disability claims. It is estimated that preventable illnesses make up 70 percent of medical costs in the United States.
How can the use of preventive medicine be encouraged?
It may simply be a case of proper emphasis. According to Health and Human Services Secretary Kathleen Sebelius, ‘The health-care system is tilted toward a disease system rather than a wellness system.’ If we placed more emphasis on keeping people well, on being proactive rather than reactive in terms of health care, we could better manage rising health care costs.
An employer can play a significant role in emphasizing preventive medicine, since employees spend so much of their time at work. If healthy lifestyle behaviors are encouraged and risky behaviors, such as tobacco use, are discouraged, employers can help mitigate the rising cost of health care.
What are some preventive measures that can be effective?
There is a clear link between risk behaviors and health problems. In a study published in the American Journal of Health Promotion, researchers found that more than half of health care expenditures can be attributed directly to unhealthy lifestyle behaviors such as smoking, inactivity and obesity, costing U.S. businesses $13 billion annually.
In general, there is a ‘Big 3’ in terms of risk behaviors driving up health care costs. The first is obesity/poor nutrition; 60 percent of Americans exceed an ideal BMI (body mass index) and have 36 percent higher medical costs. The second is tobacco use; the 25 percent of Americans who smoke incur $230 more in medical costs per year. The third is a sedentary lifestyle; 60 percent of Americans don’t perform any substantial activities or exercises on a daily basis. Less active adults are at greater risk of developing chronic ailments such as heart disease, colon cancer, high blood pressure and type 2 diabetes.
How can controlling risk behaviors benefit employers?
Research has shown that the elimination of just one risk factor can increase productivity by 9 percent and reduce absenteeism by 2 percent. There is also evidence that as lifestyle risk factors rise so do health care costs. Employees who are physically active at a moderate frequency (one or two times per week) and employees who are very active (three or more times per week) have $250 less in health care costs per year than more sedentary employees, and $450 less in health care costs per year than employees who are obese.
The costs of presenteeism are $500 higher annually for moderate to extremely obese workers than for other workers.
A 2009 report from the Change Agent Work Group, a collaboration of industry and thought leaders working to improve workforce health and productivity, concludes: ‘The ability to add value to the business through better management of employee health may be the largest untapped source of competitive advantage.’
Can preventive measures be effective in reducing chronic conditions?
Statistics show that chronic diseases account for 55 percent of health care expenditures, 85 percent of hospital costs and 69 percent of physician expenditures. Many chronic diseases are preventable and capable of being controlled if they are properly identified and managed.
We have to understand the value of having health care providers who not only treat the sick but also promote health and prevent illness.